I can't tell how old the messages in this thread may be, so at the risk of replying to something that was posted in "aught-three" ... When sound is so loud that it threatens to overload the microphone's own electronics (a capsule is nearly impossible to overload with sound alone), use the pad in the microphone. It works between the capsule and the amplifier circuitry of the microphone.
But the pad in a microphone usually reduces the output of the capsule without affecting the (fixed) noise level of the mike's electronics. Thus it raises the microphone's noise level relative to its sensitivity. The pad at the input of a recorder generally doesn't have this problem, so if you can use the pad in (or at) the recorder, it's generally preferable.
Nowadays most microphones can handle such high sound pressure levels that the only times they actually overload are when the sound levels are actually hazardous to your hearing--or else when something else less obvious is going on, such as wind noise or inadequate powering.
Different scenario: If a recorder's inputs are being overloaded with the signals from the microphones, and the recorder has no pad, then it's better to buy in-line resistive pads and use them at the inputs of the recorder, rather than use the microphones' built-in pads for this purpose. Same reason as above: You'd be increasing the noise level of the recording.
In a pinch, however, a moderate amount of extra noise is preferable to overload distortion ("brickwalling")--so if you have no alternative, use the pads in the microphones, by all means.
--best regards
P.S.: Just to get back to the topic of this thread for a tiny moment: According to the gentlemen who developed the ORTF miking arrangement, large-diaphragm microphones shouldn't be used. Even small-diaphragm microphones that are "side addressed" should not be used. They have their reasons, which I can go into if anyone here is interested.